Fears cloud trade pact despite Govt assurances

November 15, 2014

The AMA has urged the Federal Government to avoid any trade-offs in the terms of the controversial Trans Pacific Partnership trade deal that could push up the cost of medicines.

As negotiations on the heavily criticised agreement intensify, AMA President Associate Professor Brian Owler has called on the Government to ensure the interests of patients are not compromised, including by undermining the Pharmaceutical Benefits Scheme and forcing up drug prices.

“While there’s been some discussion that won’t be the case, obviously we don’t want to see any trade-offs that might adversely affect the prices and availability of medications for Australian patients,” Professor Owler told ABC radio. “I think it’s very important that the interests of the Australian Government, but also of patients and individual consumers in Australia, are protected through trade agreements.”

Pressure is mounting to finalise the negotiation of the TPP – which looms as the world’s largest trade pact, encompassing more than 40 per cent of global economic output – as China pushes ahead with plans for a rival Free Trade Agreement for the Asia-Pacific.

Trade Minister Andrew Robb has expressed optimism that the deal can be completed next year, and has given assurances that the Government would not agree to terms that made drugs more costly or compromised the country’s ability to protect public health.

“There is no way the Government would take a decision that would in any way adversely affect the PBS or the Australian health system more generally,” Mr Robb told The Australian.

A spokesman for the Minister told the Sun Herald that the Government had “made it perfectly clear that we will not enter into any agreement that has a negative impact on our health system, our Pharmaceutical Benefits Scheme or, indeed, the price of medicines, and to say otherwise amounts to scaremongering”.

But intense secrecy surrounding the negotiations has helped fuel fears about the TPP, which includes the United States, Japan, Australia, Mexico, Canada, Malaysia, Chile, Singapore, Vietnam and Peru.

Much concern has focused on protections for intellectual property that might be included in the deal, particularly the possibility that they might enhance the market power of multinational pharmaceutical companies by extending patents, discouraging competitors and potentially forcing prices higher.

Critics are also worried investor-state dispute settlement (ISDS) provisions could allow private corporations to mount legal challenges against public health measures, such as has happened with Australia’s plain packaging laws.

The Government has insisted that ISDS clauses in the agreement contain carve-outs that would allow governments to continue to regulate in the public interest in areas such as health.

But University of New South Wales research Associate Professor Lynn Kemp told the Sun Herald that even if such clauses do exist, the possibility that they may be subject to legal action could discourage many governments from embarking on pioneering public health legislation.

“This is a real concern for Australia, because we’ve been one of the most innovative countries in public health measures, in particular in terms of smoking,” A/Professor Kemp said.

Draft TPP documents obtained by the whistleblower website Wikileaks back Government claims that the negotiating texts are “live documents [that are] forever changing”.

Wikileaks said the documents showed that between August 2013 and May 2014 there were changes in the treaty’s patent provisions that had the potential to make some drug more costly, though they also showed significant resistance to a push by US and Japanese negotiators to allow drug companies to “evergreen” patents by making enabling them to claim new patents on drugs that are altered only slightly.

But, Wikileaks said, provisions that would allow for the patenting of surgical methods had been dropped – seen as vitally important in allowing doctors to use medical procedures without fear of legal action.

Prospects for the conclusion of the TPP have been complicated by developments in American politics.

Even before the Republican whitewash in the US Congress mid-term elections, the Congress had declined to renew President Barack Obama’s negotiating authority, and although Republicans are generally seen as strong backers of the TPP, they may be reluctant to give President Obama the opportunity to conclude the deal during the final two years of his term.